The impact of the ‘immigration economy’ on California

(1 of )The undocumented worker passes like a ghost through the economy, but has a generally positive impact, according to studies. (SHUTTERSTOCK)

(2 of )The Breakaway Cafe participated in "A Day Without Immigrants" on Feb. 16. (Photo by Robbi Pengelly/Index-Tribune)

DAVID TEMPLETON

INDEX-TRIBUNE STAFF WRITER | February 27, 2017

The ongoing effect of immigration, documented and otherwise, on American jobs has been a near-constant source of debate for decades in the United States – and certainly these days in the Sonoma Valley, following heightened rhetoric from the White House and Trump administration executive orders on immigration enforcement, Muslim travelers and Syrian refugees.

In the news, on talk shows, and even at White House press conferences, the battle of words is growing hotter by the day.

But what do the numbers say – and what do they tell us about how immigration is affecting California?

According to a study published earlier this month, businesses owned and operated by immigrants are currently thriving in California, generating far more local jobs in the Golden State than such immigrant-owned businesses do in any other part of the country. Published by the Washington D.C.- based business-tracking website WalletHub, the study sought to determine which states are seeing the largest economic impact from immigrants. The study concludes that California is the state in which immigrants are making the biggest difference – and, says the report, their impact is largely positive.

In second place is New Jersey, followed by New York, Massachusetts, and Washington D.C. At the other end of the spectrum, the five states showing the least amount of economic impact – positive or negative – are Oklahoma, Iowa, Mississippi, Arkansas and West Virginia – all showing the lowest number of jobs springing from immigrant-owned businesses.

“In order to determine which states benefit the most from immigration,” the study reads, “WalletHub’s analysts compared the 50 states and the District of Columbia across 18 metrics, ranging from ‘median household income of foreign-born population’ to ‘jobs generated by immigrant-owned businesses as a share of total jobs.’” According to the study, California also leads all other states in having the highest percentage of foreign-born workers employed in the fields of science, technology, engineering and mathematics.

California also ranked highly in terms of the percentage of jobs (out of the total number of jobs) created by the presence of international students in the state. As to the underlying question of whether undocumented residents contribute more to the economy than they cost, several contributors to the study weighed in.

“The mountains of research on this topic are inconclusive,” says Peter O’Brien, professor of political science at Trinity University, in the study. “While migrants can be a drain on welfare states, they bring a benefit to the economy and the state in the form of cheap labor and tax revenues, not to mention industry and innovation.”

Experts in the study also examined the impact of removing large portions of the immigrant labor force from the state, an action that one contributor says would cause, “a humanitarian crisis.”

Idean Salehyan, associate professor of political science at the University of Texs, doesn’t think Americans would “tolerate images in the news of parents being deported while their crying children are left behind.”

“That said,” continues Salehyan, “we do need to acknowledge that people entering illegally did break the law, and as a nation of laws, there will be penalties for it. Having the undocumented come forward, pay a fine, and have their status adjusted, would be the most humane way to deal with the issue.”

According to Al Lerma, director of business development for the Sonoma County Economic Development Board, there are about 4,000 Hispanic-owned businesses in Sonoma County.

“You can make generalizations and assumptions about the immigrant population of the United States, but there are so many sources of information that point to the fact that immigrants contribute millions of dollars to our economy – on the national level, the state level and the county level,” says Lerma.

In addition to the jobs created by immigrant-owned businesses, Lerma says the buying power of Sonoma County’s immigrant population must also be taken into account.

“Immigrants are also consumers,” he says, “and when you look at their numbers, their consumer power is significant.”

Lerma describes the impact on Sonoma County of immigrant spending – documented and not – as “sizable.”

“If you take that income out of the picture, that number is going to really hurt the economy,” says Lerma. “Immigrants buy cars, they buy refrigerators, they buy consumer goods – just like everyone else.”